David Kirby – Director, Investor Relations Manolo Marquez – Chairman and Chief Executive Officer Stephen Nolan – Executive Vice President and Chief Financial Officer.

David Sachs – Hocky Capital Jeff Silber – BMO Capital Markets.

Good morning. My name is Arnica [ph] and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Q1 2015 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

I'll now turn the conference over to David Kirby..

Thank you, operator and good morning, everyone. Welcome to the Hudson Global Conference Call for the First Quarter of 2015. Our call this morning will be led by Chairman and Chief Executive Officer, Manolo Marquez; and Executive Vice President and Chief Financial Officer, Stephen Nolan.

Please be advised that except for historical information, the statements made during the presentation constitute forward-looking statements under applicable securities laws. Such forward-looking statements involve certain risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements.

These risks are discussed in our Form-8K filed today and our other filings made with the SEC. The company disclaims any obligation to update any forward-looking statements. During the course of this conference call, references will be made to non-GAAP term such as EBITDA.

And EBITDA reconciliation is included in our earnings release and quarterly slides, both posted on our website at hudson.com. I encourage you to access our earnings materials at this time. They are on the website under future documents and will serve as a helpful reference guide during our speakers’ remarks.

With that, I’ll turn the call over to Manolo Marquez..

Thank you, David. Thank you all for joining us on our 2015 first quarter earnings call. As you know, Stephen Nolan will start to lead the company later this week. I will be very brief in my remarks today. I will let him share with you the details of our first quarter performance and outlook.

As part of our decision to bring a sharp focus to our investment in the areas where we can demonstrate profitable growth, we are also announcing today, that we entered into an agreement to divest our IT business in the Americas for $17 million in cash as well as retained working capital and divested our project starting business in the Netherlands for €8 million in cash.

And we are seizing our operations in four small loss making countries in Europe. During the first quarter, we continued to see constant currency gross margin growth, in most of our key market. Most notably in Asia-Pacific, where we made the majority of our investments to last year.

Overall gross margin growth for Asia-Pacific was 11% in constant currency. Our China requirements led the way in that region with at 30% improvement and Australia requirement came close growing by 24%. Most importantly, our temporary contracting business began to grow as well in Australia and if so by 16%.

In the Americas after the divestiture of eDiscovery last year and now our IT business gross margin for our remaining business in RPO grew by 19%. In Continental Europe, Belgium our largest and most profitable operation, enjoyed gross margin growth of 5% and improved their adjusted EBITDA by over 50%.

Although, we still need to restore our growth in the UK, probably we have made in all our other key markets has been reassuring. In parallel, we have continued to deploy a more efficient organizational model and rationalize our cost base.

We have recently removed our New York company headquarters from our Lexington Avenue to a much smaller and more affordable space. Almost two years ago now, I’m very pleased when Stephen agreed to join the company as Chief Financial Officer.

He is then – he and I have worked in close partnership with the rest of the company’s management team executing our strategy. As in the Stephen’s case, we hired plenty of outstanding talent from industry leading peers and promoted many professionals within our ranks.

They help us manage the transformation of a highly complex business in an adverse international economic environment. It is an challenging times, when people’s capabilities and values are also detected. I cannot thank our teams enough for the trust, initiative, enthusiasm, dedication and support along the past four years.

And aside I’ll give now the floor to Stephen to provide more details in our performance. I wish him and also many excellent leaders and professionals all the luck and success they deserve in the future achievements..

Thanks Manolo, and on behalf of everyone on the Hudson team, we thank you for all your hard work and leadership during the past four years. We wish you Carmen and family all the very best going forward. It will be an honor to take on the role of Hudson CEO on May 13.

During my two years with Hudson, we’ve worked to focus on our core businesses to build and retain a talented team that can drive a disciplined execution and invested selectively where we have identified opportunities to win.

We have funded these investments through reductions in our general and admin cost base and by exiting or divesting certain non-core practices on market. Our work continues, but we’re seeing good progress in many areas, it is critical we maintain our focus on driving profitable growth in our core businesses during these transitions.

Turning to the first quarter results, revenue came in at the upper end of guidance at $124 million down 3% year-on-year in constant currency. Permanent recruitment was up 4% temp contracting fell 5%, RPO fell 2% and talent management was down 6%.

Gross margin was $48 million flat year-on-year in constant currency, RPO gross margin grew 5%, permanent recruitment grew 4%, while temp contracting fell 6% mainly due to weakness in the UK and in the U.S. SG&A costs were $52 million, 4% higher than last year driven by a 10% increase in fee earner headcount mainly in Asia-Pacific.

Related comp costs were $2.4 million in constant currency. Q1 includes a $700,000 accrual of the CEO transition. We continue to offset our investment in fee earners with savings, and real estate and other G&A costs and we expect to see additional progress in the UK and U.S.

First quarter adjusted EBITDA was a $4.3 million loss compared to a $2 million loss last year. Excluding the CEO transition charge first quarter adjusted EBITDA was within our guidance range. Turning to regional and country performance in the first quarter. Americas’ first quarter gross margin grew 3% compared to last year.

RPO continued to perform well with a 19% year-on-year increase in gross margin. SG&A cost were $1 million higher than last year due to investments in RPO offset by $800,000 lower support costs. The comparison is impacted by the allocation of $1.3 million to discontinued ops in the first quarter last year.

Adjusted EBITDA was $900,000 lower than last year due to the weaker IT results and higher costs. As Manolo mentioned we’ve entered into an agreement with Mastech for the sale of our IT business and we extend our thanks to the U.S, IT team and best wishes going forward with Mastech after we close, which is expected later in second quarter.

Asia-Pacific had a strong first quarter with year-over-year growth in revenue and gross margin of 6% and 11% respectively in constant currency. Gross margin improvement was driven by 27% growth in permanent recruitments and 10% growth in contracting.

RPO gross margin fell 6% as we saw lower activity at some of our larger clients of continued progress with projects and new business wins. Adjusted EBITDA in Q1 with $800,000 better than last year, due to the better gross margin mix and cost savings. In the first quarter Australia gross margin grew 4% led by strong Perm and contracting results.

China gross margin grew 31% led by Perm and RPO. In Europe, first quarter results were mixed with gross margin dropping 9%. Adjusted EBITDA was $1.9 million lower almost all in the UK. UK revenue was 13% below last year while gross margin fell 18% due to weaker results in Perm and temp recruitment.

Year-over-year recruitment gross margin fell 22% mainly due to weakness in the IT and legal practices. We’re replacing leadership in both practices in England. RPO gross margin grew 14% of the implemented new business wins. Continental Europe saw flat year-on-year performance of growth in Belgium and Spain offset by weaker results in France.

We sold our Dutch business late last week to management and a local investor and we wish Arion and his team the very best of luck with their new venture. In addition we did exit Ukraine, Slovakia, Czech Republic and Luxembourg.

In the first quarter, we incurred $1.3 million in restructuring charges and continuing operations mostly severance and real estate costs in Europe and in the Americas. We saw a year-on-year reduction in support and real estate costs of $2.7 million, which was offset by investments in fee earners and standard costs in the U.S.

At the end of March, we had $5 million of approved restructuring accruals remaining and we continue to aggressively implement cost savings opportunities. We ended the quarter with $14 million in cash and $26 million in available borrowings totaling $14 million in liquidity and no credit facility borrowings.

Use of cash in the quarter was somewhat higher than the normal Q1 seasonality, due to higher accounts receivable, payment of bonuses in the markets that met their targets. DSO was 52 days up from 43 days at the end of December. A few additional data points from the first quarter, Q1 results included $500,000 of stock compensation inline with 2014.

Our first quarter tax provision for continuing ops was $100,000 credit. Capital expenditure was $700,000. And we expect approximately $3 million to $4 million of CapEx during the year.

Looking to the second quarter, we expect our international business will continue to be impacted by weaker currency trends, our prevailing exchange rates we expect a revenue range of $117 million to $127 million. Our guidance assumes an average exchange rate of US$1.52 to sterling, US$1.11 to euro and $0.79 to the Australian dollar.

Our reported second quarter of $24.51 million which translates to $132 million at our estimated rates for the second quarter of 2015. If we adjust for businesses we have sold our exited 2014, Q2 revenue was a $122 million at constant rates so our Q2 2015 revenue guidance ranges from 4% down to 4% up from last year in constant currency.

Regionally we expect Asia-Pacific revenue on adjusted EBITDA will grow year-over-year in constant currency, Americas RPO revenue will be up on 2014 the reported revenue and adjusted EBITDA will be lower.

This is driven by the timing of closing our IT sale, the lack of discontinued operations reporting for this sale standard cost following the exit of IT and legal as well as investments in our RPO business. We expect to end 2015 with a run rate in SG&A that can be sustained by the RPO business we have.

In Europe reported revenue was expected to be lower than last year due to no discontinued operations reporting for the businesses we have sold or excited. We expect our retained business to be flat. Adjusted EBITDA will be lower due to weaker results in the UK.

The UK had a very strong first half in 2014, but has struggled in recent months trading appears to a stabilized in March and April and our leaders they have continue to drive improved performance through selective investments and improving the operating model.

The rest of Europe is expected to be flat was slightly down compared to Q2 2014 and constant currency as weaker conditions at France should be offset by continued good performances in Belgium and Spain.

Overall for Q2 we expect adjusted EBITDA of between zero and negative $2 million which compares to a $300,000 loss in Q2 2014 on a constant currency basis. This excludes the impact of the change in full provisions if the board changes or approved at our shareholder meeting in June and discuss in our proxy statement.

We are committed to achieving positive adjusted EBITDA during the second half of 2015, and believe the traction we have shown over the last nine months provide the roadmap to achieve this important goal. Arnica [ph], please open the line for Q&A..

Good morning, Stephen.

Stephen?.

Hi, David. Good morning..

Good morning.

Okay, if you could just give us some proximate sizing for the Netherlands business that you are disposing off?.

Sure. So in euros revenue in 2014 was about $35 million, but $7.5 million gross margin and EBITDA about $1.5 million..

Okay.

And then in the rationale for that was a healthy asset that we disposed and you just explain the rationale for disposing of that business?.

It was – as we did our study over last 18 months, David, maybe our strategy we thought that it was a non-core business.

It’s a very unique business with project solutions, it’s got a bench model and it was really limited within the Dutch market unless we decided to invest fairly substantially to grow outside of that core market and we made a choice to invest in different areas..

Okay. And then as far as the balance sheet you’d walk through the sources or uses in this case of the cash in Q1.

Can you just talk about how those might reverse in Q2 for the balance of this year and given your forecast of a modest negative EBITDA in the second quarter in a positive adjusted EBITDA for the second half? How you see the balance sheet evolving with the proceeds coming in from these sales in the second quarter and then so how do you see operating cash generation or usage for the rest of the year.

Thanks..

I think we’re following our normal at least for last year or two David, trends, so we would expect to see probably some use in the second quarter of cash and then, to be positive probably as we finish the year..

Your next question comes from Jeff Silber with BMO Capital Markets..

I apologize we dropped off in the middle of the call. So if you talk about this just ignore me. But can you just remind us in terms of what's left by the different regions, maybe at a high level, what businesses you ran in or there any other potential assets that might be sold..

Sure, Jeff, it’s Steven. Within Europe, our main market is the UK, which is very substantial and we will continue to invest there and grow that, we have some excellent leaders, that are getting up business by contract, we have a very strong business in Belgium, again recruitments as well as talent management.

And France is a good market for us – is a good market but we are struggling with in certain areas and then Spain, a very nice business but small. And in the Asia-Pac, really no changes we remain in Australia, New Zealand, China, Hong Kong and Singapore. And in Americas we will just had an RPO business..

And then in terms of its specific verticals, that you focus on?.

So, if we start with its – we have requirements, so Perm and temp with their strengths there are in IT, finance and the mainly professional areas, the RPO which is just going very well its almost 20% of our gross margin now, and then obviously talent management continues to be a strength as well almost 15% of our gross margin..

You know are you happy in the businesses that you currently have or again would be eventually see more divestitures going forward?.

At the moment, I would say, we’re happy with the businesses that we have. But it’s been now over the last 12 months a fairly concentrated efforts to try to get back to those, three core areas and now our goal is to – use the funds we have to drive growth in those..

Okay, great. Thanks so much..

Thanks Jeff..

[Operator Instructions] You have a follow-up question from David Sachs with Hocky Capital..

Okay. So on the restructuring reserve, you’ve mentioned there was $5 million left at the end of the first quarter and from the release it would appear that you’re adding additional restructuring later in the year that the amounts that were defined by AlixPartners study.

When will the full benefit of those restructuring savings hit the financial statements for the company? And then is there additional savings that you are targeting and sort of the timeline that you see that being embedded into your results? Thanks..

So David, I think $5 million is what we have left of the provision that we made last year as we competed the AlixPartners study. We will continue to work within Q1 and in the Q2 on the finishing off some of the work there, and the main focus now with, is in Europe and in the Americas.

And I think within the scope of the provisions we have, we still have enough money to get to restructuring are need to completely done. So the full value, I think will come probably in the second half of this year..

So is it – that’s the driver of getting us to EBITDA positive in the second half on a run rate..

I think there are two things. One is and you’ll see it we have an amount of cost now in the U.S. that we have to work down. We also have to get our UK business, which has been really profitable in the past back on track and I think those two will be the key Asia-Pacific and continental Europe are actually in pretty good shape..

Okay.

So the – I’m just trying to so at what point do you think will have completed the working necessary you’re identified from AlixPartners in – its sounds like there is incremental savings above that that you are targeting with the indications for the reserves for this year?.

Yes, I would say David. We are just about finished with the AlixPartners, finished this. So there was and a lot of them that we’ve worked on, some we were able to do for less money that we might have been assumed initially. We have now more work to do I think in the U.S. and some in Europe. So I think we – it never stops.

We just wanted people to understand where we stood at this moment in terms of the progress we’ve made how much of the provisions we have left and where we’re going to focus..

Okay. And if you could just we’ve eliminated a couple of businesses U.S. IT and in Netherlands. So the run rate that we’re achieving in the first half of this year if you meet the mid-point of your guidance put this it about a $500 million in revenues business.

Is that sort of how you see Hudson on the run rate basis or do you think the business is smaller, larger, and if you can just sort of describe what you see the profit model for this reconfigured portfolio looking like over the next year or two?.

I think its about $500 million based on where we are today, David, with the numbers you will see just trade and the gross margin will be I think healthy with the mix of business that we have and we continue as we’ve talked about to get as much of the general and admin cost out as we can.

So I think all of those things should get us back to the guidance what we’ve given initially around the mid-single digits profitability..

In healthy and your permanents for gross margin that would be north of 38%..

It will be in the range of you’ve round our point. Yes, I would say, go a bit higher standing on the mix, depends on the – lot on our Perm as you know..

Okay, well. Best of luck in accomplishing that. It certainly appears you are in good financial shape with the liquidity and the balance sheet, the proceeds coming in from these last two asset sales will help and thank you..

Thank you, David..

[Operator Instructions] At this time there are no further questions..

Well, thank you, operator. And thank you all for joining the Hudson Global first quarter conference call. Our call toady has been recorded and will be available on the Investor section of our website, hudson.com shortly. Thank you, have a great day..

Ladies and gentlemen, this concludes today’s conference call. You may now disconnect..